4 Jul 2012

LIVE BLOG: Ex Barclays chief Bob Diamond questioned over Libor ‘rigging’

Bob Diamond gives evidence to the Treasury Select Committee a day after he was forced to stand down as Barclays chief executive following the Libor index “rigging” scandal.

• Diamond ‘physically ill’ at Libor-fixing emails
• Diamond: I think it’s wrong, I’m making no excuses
• Diamond says payoff and bonuses a matter for board

Bob Diamond gives evidence to the Treasury Select Committee

Analysis from Faisal Islam: Bombshell Diamond leak from secret FSA assessment of Barclays

5.07 Bob Diamond‘s evidence concludes.

5.05 Mr Diamond says he “appreciates the opportunity” to give evidence today and reiterates that “mistakes” were “admitted” and “acted upon”. He says Barclays will be the “first to come out and correct” bad behaviour but he adds that he is worried other banks will not have an incentive to come forward.

5.00 Bob Diamond: “I do hope we look at this [the Libor problem] as having been a number of years ago, not today.”

4.55 Mr Diamond is asked again how could it be possible he did not know about the problem until recently, despite the existence of the Paul Tucker memo from 2008 about “senior” Whitehall sources apparently pestering the Bank of England over Libor rates in 2008 . Mr Tucker is deputy governor of the Bank of England and earlier requested that he too gives evidence to MPs.

Read Economics Editor Faisal Islam’s latest blog: Tyrie’s FSA bombshell wounds contrite Diamond

4.38 Bob Diamond: “I feel very strongly that my team ‘gets it’. One of the frustrations of today is that most of this behaviour was back in 2005-2007.”

4.32 It is estimated Bob Diamond made over £21m in pay, shares and perks last year. Labour MP John Mann says Mr Diamond “might get a little love” if he gave back some of the money he had made which, he says, exceeded that of homeless charity Shelter last year. Mr Mann adds that voters have asked him if they should withdraw their money from this “robbing thieving bank”.

4.30 Mr Diamond is asked if he will forfeit his shares in the company and “take the moral high ground”. He again says that is a matter for the board.

4.25 Mr Diamond reveals he did not know that Quakers (the breakfast cereal firm) founded Barclays (in the 17th century). Quakers’ principles were “honest, integrity, plain dealing”.

Latest from Channel 4 News Political Editor Gary Gibbon’s blog: Bob Diamond, good manners and puking

4.15 Diamond says “we need a strong culture of systems and controls” but not a new business structure.

4.10 Mr Diamond again says of the Libor scandal: “I think it’s wrong, I’m making no excuses… ” He is cut off by the committee as he begins to say “But Barclays is an amazing place…”

4.08 Mr Diamond says his view from 2011 remains that “banks have to be better citizens”.

4.05 Mr Diamond says Barclays has spent £100m on investigating the Libor-rigging scandal.

3.52 Mr Diamond is asked about the 177 emails sent to rate-setters containing Libor requests. Why were the Libor setters not alerting the compliance department? Mr Diamond says “during this period they weren’t and that is unacceptable”.

3.44 Mr Diamond is asked about his own time as a trader. On the matter of fixing rates or even discussing how doing so might make life “easier” he says no, “there was nothing like that”. He also reveals Barclays has a “no jerk” rule. “If people don’t behave, they leave,” he says.

3.43 Bob Diamond: “The 16 years in my time at Barclays are a time of immense pride.” He is asked noth about whether those involved should lose bonuses and about his own payoff. Mr Diamond says that is a matter for the board.

3.42 Mr Diamond is asked if he thinks this scandal will be damaging to Barclays. He says that is a question for the board.

3.38 “The best we can do is learn from those mistakes,” says Mr Diamond, but says he would “worry” about further regulation of banks and the impact of that on their competitiveness.

3.36 Andrea Leadsom MP: “This wasn’t about the banks but about absolute corruption.”
Bob Diamond: “I think you take the conclusion way too far.”

3.35 Mr Diamond says “I’m not making an excuse, the behaviour was abhorrent” but that rate-setters have been a “core part of the business for many years”. He says the risk in the area of rate-setting “exploded during the financial crisis”.

3.30 Bob Diamond is asked what he will do about “openly fraudulent behaviour” in the future. He says assessing further issues will be a “regular part of the audit cycle”.

3.27 Mr Diamond is asked whose job it was to watch out for “criminal activity in the dealing room”. He says that would have come under “compliance” but that Libor-fixing was not reported from supervisors at desk level. He says “the second we did” know about the problem they addressed it. He also says that supervisors would have been aware Libor rate-fixing was wrong.

3.23 Conservative MP Andrea Leadsom tells Mr Diamond that he is living in a “parallel” universe and it is in fact the “culture” of Barclays that led to a “criminal” problem. She labels the Libor scandal “collusion on a grand scale”.

3.21 Mr Diamond is asked why two CEOs failed to deal with the Libor-rigging problem. He responds: “I think the culture [of Barclays] has shown that when we have a problem, we’re all over it.”

3.14 Mr Diamond is asked why he did not know earlier about the Libor “rigging”. Labour MP George Mudie asks “what kind of firm were you running?” Mr Diamond again says the actions brought to light were “reprehensible”. He is asked about the senior managers who might have been responsible. He diverts again and says this “wrong behaviour was addressed as soon as it came to light”. Mr Diamond points out that John Varley was Barclays chief executive at the time three years ago.

3.09 Bob Diamond: When I read the emails from those traders [re: Libor rate-fixing], I got physically ill. There is no excuse for those activities. This is wrong and I’m not happy about it. This does not represent the Barclays I know… with people working hard day in and day out.”
Mr Diamond repeats: “It was wrong.”

3.06 Mr Diamond says he didn’t know about low-balling submissions until this month.

2.55 On his former right-hand man Jerry del Missier’s Libor submissions, Mr Diamond says there was “a misunderstanding or miscommunication” with government officials.

2.51 Mr Diamond is asked whether he thinks he was being asked to “fiddle submissions” on Libor. He says “Barclays had consistently been on the high end during the financial crisis” and seems determined to point the figure at other banks, saying he was “worried” that other banks with “secret loans and banks that were being nationalised… were posting at levels significantly below ours.” He adds that this was “at the very core of banking” and a “huge issue”.

2.42 Mr Diamond is now asked by Jesse Norman MP, also a former Barclays employee, if he thinks the Bank of England (BoE) was slow to respond to the economic crash in 2008. He says “no I don’t” but mistakes the question for one about Barclays not the BoE. He then says: “There are many different levels of response…. we were working with more encouraging activity, certainly in the money markets. When we look back on the that period it would be fair to say that Barclays – because of tradition, the brand name… had access to funding that was different to many banks.”
Again Mr Diamond is interrupted and asked to answer the question relating to the BoE.

2.34 Mr Diamond is told “we know that others were up to this”. He is questioned on whether there was a “nod and a wink” [from government] but then says he was “not the key person” monitoring Libor despite receiving a daily report on Libor ratings.

2.32 Mr Diamond is now being questioned about the manipulation of Libor rates. He says: “There was a perception in Whitehall that our rates were high relative to others, and if they took that to mean we would have trouble funding… and it was clear a number of the firms posting had been nationalised… then we would question whether some of the institutions could get funds at the levels they were posting.”

Former Barclays chief exec Bob Diamond says he doesn’t know of any concerns over his appointment to lead the bank, nor of a loss of confidence by the regulator, the FSA, in his leadership by February 2012.

2.20 Committee chairman Andrew Tyrie suggests the FSA had reservations about Diamond’s appointment as CEO in September 2010. Diamond says that’s the first he’s heard of it.

2.15 Mr Diamond says his decision to resign was because of the “questions about my leadership” and because he wanted to help Barclays not be the the only bank caught up in the Libor scandal. He again says “I love Barclays,” adding: “History will judge Barclays as an incredible institution because of its people.”

Read more: Diamond to shine at select committee?

14.12 Mr Diamond begins his evidence saying “I love Barclays and I love the people”. He admits that “clearly there were mistakes, clearly there was behaviour that was reprehensible”.

The day after his resignation, reportedly after pressure from the governor of the Bank of England and the chairman of the Financial Services Authority, Bob Diamond is questioned by MPs about the Libor “rigging” scandal. Meanwhile, Bank of England Deputy Governor Paul Tucker has requested to attend a hearing with the committee as soon as possible to “clarify the position”. Add your voice in the window above or on Twitter @Channel4News